Research › Search › Judgment

Uttarakhand High Court · body

2007 DIGILAW 442 (UTT)

STATE OF U. P. v. HARISH CHANDRA & COMPANY

2007-08-14

B.C.KANDPAL, P.C.VERMA

body2007
JUDGMENT Coram : Hon'ble P.C. Verma, J. Hon'ble B.C. Kandpal, J. This Appeal, U/S 39(1) of the Arbitration Act, against the judgment and order dated 21.12.1987, passed by Civil Judge, Dehradun, in Misc. Case no. 103 of 1987 arising out of suit No. 397 of 1987, whereby the objections of the State of U.P. filed U/Ss 30 and 33 of the Arbitration Act, against the award dated 11.7.1987, were rejected and the award was made rule of the Court. 2. Brief facts of the case are that Sri S.P. Bhargava, the sole Arbitrator submitted his award dated 11.7.1987, in the dispute arose between the parties with respect to agreement No. 5/SE/79-80 for construction of Khara Power Channel from Km. 7.3 to 8.00. 3. The State of U.P. filed objection against the award before the Civil Judge. It was alleged that the Arbitrator misconducted the proceedings of the arbitration and the award is liable to be quashed. The main contention was that the Contractor was to complete the work by 30.11.1981, but he failed to comply with the condition of the contract. He completed 95% of the work till March, 1984 and thereafter he did not do the remaining work. According to the State of U.P. the contractor demanded additional charges on account of high costs of the construction work. It was also alleged that the contract covered all types of strata, sand, clay, single boulders, bajri and rock etc. The contention of the contractor that hard rocks is not covered under the contract, is not correct and he is not entitled to any additional charges for excavation of hard rocks. It was also alleged that claim No. 1 and claim No. 3 are identical in nature but the Arbitrator has given contradictory findings on these claims. The excavation in all type of strata mixed with sand, shingle, boulder, clay, shale, conglomerate and all types of rocks etc. has been described in Schedule 'C' and the rate was agreed at Rs. 14.35 per cum but the Arbitrator awarded the rate of excavation at Rs. 40/- per cum which is totally against the agreement. The award under claim No. 4 has been decreed against the terms of clause 7.09 of the agreement. It was also alleged that the interest awarded by the Arbitrator is against the provisions of condition No. 1.09 of the agreement. 4. 40/- per cum which is totally against the agreement. The award under claim No. 4 has been decreed against the terms of clause 7.09 of the agreement. It was also alleged that the interest awarded by the Arbitrator is against the provisions of condition No. 1.09 of the agreement. 4. The respondent/contractor filed written statement before the learned Civil Judge, alleging therein that the delay in completing the work was due to the fault of the Department as much as site and the map was not delivered to the respondent in time. It was also alleged that the excavation of all types of strata including hard rocks was not included in the terms of the contract. During excavation pure hard rock was found at the site. According to him he employed machines and experts for the purpose. Claim No. 1 relates to excavation of pure hard rock 1.5 lacs cum while claim No. 3 relates to amount payable on account of change in the character in strata of 8.5 lacks cum of excavation done due to increase in the presence of hard rock provided in the departmental analysis to 25%, therefore both were separate claims. The Arbitrator had considered clause 7.06 and 7.07 while giving his award and the same cannot be challenged at this stage. According to him rate of Rs. 14.35 per cum was agreed only in respect of excavation in mixed type of strata and not for excavation of pure hard rock. The Arbitrator has not misconducted the arbitration proceedings in awarding the rate of pure hard rock @ Rs. 40.00 per cum. 5. The learned Civil Judge framed following issues in the case : 1. Whether the award is liable to be set aside as alleged in the petition? 2. Whether the court has no jurisdiction to investigate into the merits of the claim and the findings of the arbitrator? 3. What relief if any the petitioner is entitled? 6. The learned Civil Judge rejected the objections filed on behalf of the State of U.P. and made the impugned award as rule of the court. 7. Feeling aggrieved, the State of U.P. through Superintending Engineer, Irrigation Construction Circle, Dehradun has preferred this appeal before this Court. 8. We have heard the learned counsel for the parties and perused the record. 9. 7. Feeling aggrieved, the State of U.P. through Superintending Engineer, Irrigation Construction Circle, Dehradun has preferred this appeal before this Court. 8. We have heard the learned counsel for the parties and perused the record. 9. The learned Standing Counsel first of all argued that the learned Civil Judge has erred in accepting the finding recorded by the Arbitrator inasmuch as the claim Nos. 1 and 3 of the contractor were identical in nature and the Arbitrator has accepted the claim No. 1 and refused the claim No. 3. She also urged that the learned Arbitrator has fully ignored clause 7.06 and 7.07 of the agreement along with Schedule-C of the agreement. 10. On the other hand the learned counsel appearing on behalf of the contractor/respondent has refuted the submission of the learned Standing Counsel and supported the findings recorded by the learned Civil Judge as well as that of Arbitrator. According to him the contractor has done the excavation work of hard rock, whereas as per the agreement the excavation was of strata mixed with sand, shingle, boulder, clay, shale etc. The contractor also carried the rock sorting work. 11. The contractor has raised the following claims before the Arbitrator :- 1. Excavation of pure hard rock 1.5 lacs cum. 2. Amount due on account of difference of payment due to the rates of Rs. 14.35 per cum and Rs. 30.80 per cum actually paid. 3. Amount payable on account of change in the character in strata of 8.5 lacs cum of excavation done due to increase in the presence of hard rock provided in the departmental analysis to 25%. 4. Extra work involved in sorting out of boulders of more than 15 cm in size. 12. The Arbitrator allowed the claim Nos. 1, 2 and 4 and claim No. 3 was disallowed. The Arbitrator has disallowed the claim in the following specific words :- "A sum of Rs. NIL is hereby awarded in favour of the claimant due to excavation of material alleged to be of a different nature than provided in the agreement." 13. The aforesaid verdict of the Arbitrator is contradictory in allowing the claim No. 1, as claim No. 1 also pertains to the excavation of hard rock of a different nature than provided in the agreement. The aforesaid verdict of the Arbitrator is contradictory in allowing the claim No. 1, as claim No. 1 also pertains to the excavation of hard rock of a different nature than provided in the agreement. According to the Department Schedule-C-2 of the contract agreement has the description of the work to be carried out by the contractor, in the following way :- "Excavation in all types of strata mixed with sand, single, boulders, clay, shale, conglomerate and all types of rock etc." 14. The description of work agreed upon between the parties in the contract clearly indicates that the contractor had to carry out the excavation work of all types of rock etc. By plain reading of the concluding words of the above terms, 'and all types of rock etc.' points out towards all kinds of rocks that may be hard rock, strata mixed with single, boulders, clay, shale etc. The Arbitrator has awarded a sum of Rs. 38,47,500/- towards excavation of hard rock 1.5 lacs cum @ Rs. 25.65 per cum, along with interest @ 18% per annum on the sum from the date 6.12.83 to the date of award i.e. 11.7.87 and thereafter @ 12% per annum till the amount is paid. He has further awarded for excavation of hard rock done after filing the claim for 2500 cum @ 25.65 per cum in addition to the rate of Rs. 14.35 per cum as provided in the agreement. 15. The Arbitrator has awarded the rate of excavation of rock @ Rs. 40.00 per cum, whereas the rate agreed between the parties in the agreement was Rs. 14.35 per cum. The increase in the rate by the Arbitrator is also against the terms and conditions of the contract agreement, agreed between the parties. 16. In view of specific work mentioned in Schedule C-2 of the work contract, the Arbitrator has travelled beyond the terms of agreement by misinterpreting the nature of excavation work. Therefore, there is gross error on the face of the award itself, which comes within the purview of misconduct. 17. The learned Standing Counsel also submitted that the Arbitrator has again misconducted himself and the arbitration proceeding by awarding Rs. 7,16,000/- for the sorting out of boulders of more than 15 cm against the conditions of agreement clause 7.09 and the award is liable to be rejected. 18. 17. The learned Standing Counsel also submitted that the Arbitrator has again misconducted himself and the arbitration proceeding by awarding Rs. 7,16,000/- for the sorting out of boulders of more than 15 cm against the conditions of agreement clause 7.09 and the award is liable to be rejected. 18. On the other hand learned counsel for the contractor has argued that the sorting out of boulders from the earthwork was an extra work and the Arbitrator has rightly allowed the claim No. 4 of the contractor. 19. We have carefully considered the arguments of the learned counsel for the parties and have gone through the terms and conditions of the contract agreement. Clause 7.09 of the agreement reads as under :- "In excavation all boulders of size more than 150 mm. Shall be sorted out from the earthwork and staked properly as directed by the Engineer-in-charge. Nothing extra shall be paid to the contractor for the same." 20. The Arbitrator while allowing the claim No. 4 of the contractor had given the reasons that the boulders were not only required to be sorted out but were also transported to specific sites. The specific provision in the agreement clearly indicates that nothing extra has to be paid to the contractor for the work of sorting out the boulders. This work seems to be included in the excavation work. The contractor/respondent had agreed to the above terms at the time before execution of the work and now he cannot claim this as extra work. The Arbitrator has certainly exercised the jurisdiction outside the terms of the agreement by allowing this claim. 21. It is also pertinent to mention here that the date of completion of work was 30.11.1981 but the contractor completed 95% of the work upto March 1984. The contractor had sought extensions on submitting 'no-claim certificates' to the department. The Department in paragraphs-4 and 5 of the objections has specifically raised the point that the contractor has not completed the work within the stipulated period and he has sought extensions from time to time on submitting no claim certificates. The contractor has completed 95% work upto March 1984 and thereafter he did not work at all. In reply to the aforesaid paragraphs the contractor has replied that the work could not be completed on account of various reasons, within the stipulated period and the extension of time was sought. The contractor has completed 95% work upto March 1984 and thereafter he did not work at all. In reply to the aforesaid paragraphs the contractor has replied that the work could not be completed on account of various reasons, within the stipulated period and the extension of time was sought. The delay was caused on account of defaults of the contractor, as he had not given those reasons due to which he could not complete the work within prescribed period. Further it was alleged that the 'no claim certificates' were submitted only for certifying that there will be no claim on account of extension sought and for no other reasons and the same has no effect on the claims under arbitration. He also raised the plea that no claim certificates' were submitted under duress. The respondent/contractor has not claimed that the 'no claim certificates' were submitted under protest. A general assertion has been made that the same were submitted under duress. The respondent/contractor has not made any effort to bring on record before the Arbitrator that actually the work was not completed within stipulated period by the default of the Department and he had filed the 'no claim certificates' for seeking extension "under protest". He has not pleaded as to when he was provided site, map etc. and he actually started the work on the specific date. The Arbitrator as well as the learned Civil Judge have not decided the above topic. 22. The Hon'ble Apex Court in a decision Food Corporation of India Vs. Chandu Construction and another, reported in (2007) 4 Supreme Court Cases 697, has held that 'the contractor's claim is to be adjudicated on the specific terms of the agreement and no other'. 23. In view of above discussion, it is established that the Arbitrator has committed a manifest error apparent on the face of the award by travelling beyond the specific terms and conditions of the contract agreement and thereby misconducted himself as well as the arbitration proceedings. The learned Civil Judge also fell in error by rejecting the objections of the State of U.P. and making the award as rule of the Court. 24. The learned Civil Judge also fell in error by rejecting the objections of the State of U.P. and making the award as rule of the Court. 24. The appeal is liable to be allowed and the impugned award as well as the judgment and order passed by the Civil Judge rejecting the objections of the State of U.P. and making the award due to the Court are liable to be quashed. 25. Accordingly the appeal is allowed. The impugned award dated 11.7.1987 and the judgment and order dated 21.12.87 passed by the Civil Judge, rejecting the objections of the State of U.P. filed U/S 30/33 of the Arbitration Act, against the impugned award, and making the award rule of the Court, are hereby quashed. No order as to costs.